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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude -- Ignore unavailable to you. Want to Upgrade?

To: Dave H who wrote (11003)	1/21/1998 1:23:00 PM
From: ivan solotaroff	Respond to of 79273

Dave: My guess is that if one were to treat these two days as a signal day, that it a) already hit enough of a bottom to satisfy the criteria, that b) the volume is now established, and that c) the final buy signal would be a close with a bid one tick above 1/2. Look at Dec. 17-19, when it took three days to bottom, then look at TRKN, which--and this is right off the top of my head and I probably shouldn't even be saying it--looks maybe a wee bit similar. The MMS are tooling around with the ASK (between 5/8 and 9/16), but they haven't touched the BID as far as I can tell. Ivan

To: Dave H who wrote (11003)	1/21/1998 5:02:00 PM
From: James A. Nelson	Read Replies (1) \| Respond to of 79273

I was looking at the FreeEdgar SEC submissions by MMGC, and found something I wasn't really looking for. I think that it may have some impact on how you look at the TA. A quick summary follows: Mego Mortgage Corp. was formed in June 1992 as a wholly-owned subsidiary of Mego Financial Corp. (NASD MEGO), and commenced origination of loans in March 1994. In November 1996, Mego Mortgage Corp. consummated an underwritten initial public offering of 2.3 million shares of Common Stock. As a result of the consummation of the IPO, Mego Financial's ownership of the Company was reduced to approximately 81.3% of the outstanding Common Stock. On September 2, 1997, Mego Financial distributed all of its 10.0 million shares of Common Stock of the Company to Mego Financial's shareholders in a tax-free spin-off. Basically, this is a dilution of shares from 2.3 million to 12.3 million with no increase in revenue. If you take a price of $15.00 with 2.3 million shares, you have a market cap of $34.5 million back in mid October (when the results of the distribution were being reported). Today, there are 12.3 million shares at $3.50, for a market cap of $43 million. If you use the market cap from October, today's price per share would be $2.80. If you use the stock price on September 2nd ($11.50) the market cap is only $26.45 million, and the diluted price per share would drop to $2.15. There are other values in a company which are not directly reflected in the market cap, of course, so this probably isn't a good way of estimating current value. However, I calculated the value of one of the prespin-off stockholder's shares with an interesting result. Prior to the spin-off, he had purchased 315,438 shares for $3,338,071. He received 607,431 shares in the spin-off distribution. The resultant 'effective cost' of his total of 922,869 shares is $3.62/share. Perhaps MMGC's price is now properly adjusted for the stock dilution due to the spin-off.